Rodney Davis Statement Regarding CARES Act

Effingham, IL -(Effingham Radio)-  Earlier today, Congressman Rodney Davis traveled to DC to vote for the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Phase III bill in response to the Coronavirus outbreak. The bill overwhelmingly passed the House, and offers many measures to support individuals, small businesses, and communities in the midst of this unprecedented situation. Included below are some of the highlights of the bill.

Small Business Administration (SBA) Payment Protection Loans

• Provides $350 billion to create a new Payment Protection Loan program which provides loans to small businesses and 501(c)(3)’s with less than 500 employees, sole proprietors, independent contractors, and self-employed individuals.
• These loans are 100% backed by the federal government with an interest rate of 4%.
• Loan amounts will be based on 2.5 times the average monthly payroll of the business or $10 million, whichever is less.
• Lenders are given delegation authority meaning these loans can be in the hands of small businesses without time consuming SBA authorization.
• The program provides for automatic deferral of principal, interest, and fee payments for the first six months.
• Amounts used to cover payroll costs, mortgage interest payments, rent, and utility bills over an 8-week period will be forgiven if the business retains employees
  • Forgiveness is reserved for employers that maintain payroll continuity from February 15, 2020 through June 30, 2020.
  • Flexibility is granted for businesses to rehire individuals already laid off and still be eligible.
  • Failure to maintain payroll continuity does not immediately disqualify forgiveness, instead, if employee numbers decrease the forgiven amount is reduced proportionally based on the prior year’s headcount.
  • Businesses will work with lenders to establish that it met payroll requirements, at which time the federal government will purchase the loan.
• For franchisees in the hospitality and food industries, the loan is available at the store/location level – allowing more small businesses to qualify.
• Individuals who have received an SBA Economic Injury Disaster loan may refinance into this new program.

Unemployment Insurance

• Creates the temporary Pandemic Unemployment Assistance program to provide federal unemployment coverage for individuals traditionally not eligible for unemployment assistance
  • Includes self-employed and independent contractors
  • Available through December 31, 2020 to individuals unable to work due to the Coronavirus.
  • Calculated based on each state’s average unemployment benefit.
• Pays states to cover 50% of the costs incurred through December 31^st, 2020 for expenses related to providing unemployment benefits to government, nonprofit, and tribal workers.
• Provides an additional $600/week to individuals receiving unemployment insurance or payments under the Pandemic Unemployment Assistance program – up to 4 months.
• Individuals who have exhausted state unemployment benefits, are eligible for an additional 13 weeks of federal benefits.

Economic Stimulus

• Up to $1,200 in economic recovery checks to individuals ($2,400 for joint filers) with an additional $500/dependent.
  • Income eligibility based on 2019 returns if filed, or 2018 if unfiled:
    • Individuals with AGI below $75,000 are eligible for $1,200.
    • Joint Returners with AGI below $150,000 are eligible for $2,400.
    • Phases out above these thresholds until eliminated at $99,000 for individuals and $198,000 for joint returners.
• Waives the 10% early withdrawal penalty for distributions from qualified retirement accounts (up to $100,000) to cover coronavirus-related expenses.
• Waives the required minimum distribution rule for 2020.
• Permits a 2020 $300 above-the-line deduction for charitable donations.
• Incentivizes businesses to pay down student-debt by providing a tax-free benefit (up to $5,250) for both the employer and employee.
• Provides a refundable payroll tax credit for businesses equal to 50% of wages paid during the COVID-19 crisis.

Healthcare

• $100 billion for hospitals to keep their doors open to cover cancelled elective operations and declining visits unrelated to coronavirus.
• $1.32 billion for community health centers.
• Expands Health Savings Accounts (HSA) to cover telehealth services related to COVID-19, and HSA and Flexible Spending Accounts for over-the-counter products.
• Allows Medicare reimbursement for telehealth services provided by Federally Qualified Health Centers and Rural Health Clinics during the COVID-19 response period and allows for reimbursement when seen by a new doctor.
• Increases Medicare reimbursement for COVID-19 patients by 20%.
• Extends Community Health Center funding through November 20, 2020.

Education

• Defers federal student loan payments for 6 months (through September 30, 2020).
• Provides $30.9 billion to create an Education Stabilization Fund to assist elementary, secondary, and higher education institutions.

Economic Stabilization Fund

• Provides $500 billion to the Treasury Department to assist severely distressed industries through loans.
  • Includes a $25 billion set-aside for passenger air carriers, $4 billion set-aside for cargo air carriers, $17 billion for businesses vital to national security, and $454 billion for other industries.
  • Loans under this program are reserved for businesses unable to receive lending through other means and limited to a 5-year maximum life. Additionally, businesses accepting loans must retain at least 90% of their workforce (as of March 24, 2020) through September 30, 2020 and must be a U.S. domiciled business.
• Businesses that accept assistance are prohibited from buying back stock and increasing the compensation of employees making more than $425,000.
• Prohibits businesses from receiving assistance if anyone owning a 20% interest in the business is the President, VP, head of an executive branch department, Member of Congress, or any such individual’s spouse, children, or son/daughter-in-law.
• Provides $25 billion in grants to passenger air carriers, $4 billion for cargo air carriers, and $3 billion for airline contractors, to cover employee wages, salaries, and benefits.
  • Prohibits stock buy backs through September 30, 2020, and freezes compensation for employees earning over $425,000 for two years.
  • Provides the Secretary of Treasury the ability to collect stocks and other such financial instruments in lieu of payment for the grants.

Coronavirus Relief Fund

• Provides $150 billion for State and Local governments through direct payments to cover expenses related to COVID-19.
• Amounts/State based on the state’s relative population but no less than $1.25 billion.

Federal Assistance to Illinois

• Illinois has either received, or will receive shortly, the following list of PPEs from the Centers for Disease Control (CDC) Strategic national Stockpile
  • N95s – 246,860
  • Surgical Masks – 588,066
  • Face Shield – 111,978
  • Surgical Gowns – 91,299
  • Coveralls – 467
  • Gloves – 325,082

• The Department of Health and Human Services (HHS) has provided nearly $3.7 million to Community Health Centers as appropriated by Phase I legislation.
• HHS has provided nearly $28 million to the State to contain the spread of COVID-19 as appropriated by Phase I legislation.